Correlation Between Cicc Fund and Shenzhen Hifuture

Can any of the company-specific risk be diversified away by investing in both Cicc Fund and Shenzhen Hifuture at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cicc Fund and Shenzhen Hifuture into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cicc Fund Management and Shenzhen Hifuture Electric, you can compare the effects of market volatilities on Cicc Fund and Shenzhen Hifuture and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cicc Fund with a short position of Shenzhen Hifuture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cicc Fund and Shenzhen Hifuture.

Diversification Opportunities for Cicc Fund and Shenzhen Hifuture

-0.38

Correlation Coefficient

Cicc Fund  Shenzhen Hifuture

Very good diversification

The 3 months correlation between Cicc and Shenzhen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cicc Fund Management and Shenzhen Hifuture Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Hifuture and Cicc Fund is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cicc Fund Management are associated (or correlated) with Shenzhen Hifuture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Hifuture has no effect on the direction of Cicc Fund i.e., Cicc Fund and Shenzhen Hifuture go up and down completely randomly.

Pair Corralation between Cicc Fund and Shenzhen Hifuture

Assuming the 90 days trading horizon Cicc Fund Management is expected to under-perform the Shenzhen Hifuture. But the stock apears to be less risky and, when comparing its historical volatility, Cicc Fund Management is 4.56 times less risky than Shenzhen Hifuture. The stock trades about -0.07 of its potential returns per unit of risk. The Shenzhen Hifuture Electric is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Shenzhen Hifuture Electric on September 18, 2024 and sell it today you would earn a total of  95.00  from holding Shenzhen Hifuture Electric or generate 38.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Cicc Fund Management  vs.  Shenzhen Hifuture Electric

Cicc Fund Management

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cicc Fund Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cicc Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Shenzhen Hifuture

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Hifuture Electric are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Hifuture sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cicc Fund and Shenzhen Hifuture

The main advantage of trading using opposite Cicc Fund and Shenzhen Hifuture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cicc Fund position performs unexpectedly, Shenzhen Hifuture can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Shenzhen Hifuture will offset losses from the drop in Shenzhen Hifuture's long position.

The idea behind Cicc Fund Management and Shenzhen Hifuture Electric pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.